Architecting Around Activities

Structure your IT organization to meet developing business environments.

12/15/2004

Steve Davis, vice president of IT at Walt Disney Studios, is the conference chairperson for the Software Architecture Summit (SAS) being held in conjunction with VSLive! San Francisco. He will be presenting his "Key Issues in Software Architecture" keynote at SAS on February 8, 2005. We spoke with Davis to get his take on new IT-business developments and how IT organizations can best adapt to emerging technological and business needs and environments.

Q: How can the structure of an IT organization quickly shift and adapt to make it more successful in handling rapidly changing conditions and projects?

Steve Davis: First, the people working on the projects must fundamentally change the way they think about them. If you apply this to a building metaphor, traditionally people tend to think they are building an institutional building that will be there for 50 years as opposed to thinking about a war and the need to get a warehouse built quickly so they can start churning out airplaneslet's make the assembly line so we can change it easily and quickly. So if you carry that metaphor over to software architecture, you have to build things that are components, simpler, more interchangeable, or more loosely coupled so that changing isn't as complicated as it is when things are tightly integrated. But it's more than just the ability to make things loosely coupled; it's actually executing it and thinking about it in that way.

Right now, when programmers think about writing a function that might authenticate someone, they think about it in a tightly coupled way with specific parameters that are strongly typed so that the call is only going to work if they have everything perfect, as opposed to having a single point interface on that function, and just sending it an XML document. Imagine it with a Word document where I typed the username and password, and I just sent that Word document into the interface, and it recognized the Word doc, opened it up, looked for the word "username" and grabbed the name. That would be a much more loosely coupled way to do it and more flexible, especially if you want to change things in the future. So back to the building metaphor, you must think about building with the idea that you're going to move walls around or tear them down. It's how a modern office building is built with the ability to wipe out the entire floor without worrying about the structure of the building and repurposing it for something else in the future. You need to build so that the major part of the investment will be protected over the long run, but your ability to be agile and change things and adapt to what's going on around you is still there.

Q; What about the organization of your IT team(s) at Disney? What has been successful for you?

Steve Davis: If you think culturally about how to build things, then you have to start to separate the talent and build a certain kind of talent. The people must be good at thinking about how to build things so that they will be able to extend and change. Then you must set the organization so that there are some people in charge of what I call the common good. So now let's go to more of a city metaphor: In a large city you need a city agency or city government or even a regional government that's in charge of stuff everyone needs, but it makes sense for them to all share the cost for the common goodelectricity, plumbingthings everyone needs, but they don't differentiate anyone. You must have an organization that looks after that part; that's what we call the below-the-line part. But these people have to be somewhat strategic in their thinking. They must build an infrastructure that must support all of the people.

Then you must have the teams of people who really understand the business. We call those people the business domain experts. We can have a lot of those teams, and they don't have to be one centralized group. The pattern is to take large infrastructure services such as telecom, help desk, messaging, and data center services, for example, defining that as the common good to aggregate our investment, and then organizing a team of people who are really good at that part of it who will lay down that infrastructure. But we feed into that process the strategy and direction we're going in along with what the technology should be.

Then above that line, in the businesses, say in home entertainment as a business, you want to have a quarter of the people who really understand home entertainment who will be responsible for building and maintaining the systems that from a technology standpoint enable that business. And we want to keep that team tight and connected to the business. So a team of domain experts exists there, and then you need the glue that holds it all together: someone who handles that business relationship from a technology perspective. Now you have an executive who's embedded in the operation of the home entertainment business who has control over what the IT staff assigned to that business does and has responsibility for the liaison into the broad infrastructure stuff I previously mentioned (messaging, help desk, etc.)this is the person who keeps all those people communicating.

Q: So how do you align your IT organization more closely with market-driven business demands?

Steve Davis: At Disney, just from a practical standpoint, we have people lined up above that infrastructure lineright where the cash registers are ringing. Within the segment of the studio, we line them up around home entertainment, domestic and international, and film distribution, domestic and international, and then the music group. We'll take more of the company's support services and group them together and provide service to them, but not as strong a level of support as where the money is being made. So this tends to operate hierarchically wherever a business unit is created in the segment. Someone runs home entertainment, so the business-technology relationship person co-reports to the president of home entertainment as well as to the CIO of the studio.

However, there might be some strategic problems with that; we'd like to move to somewhat of a different model. It's what we call an activity-based model. An activity-based model is one where we take the fundamental business processes or activities of the studio and understand how we're creating efficiency in those instead of by business unit. As a broad example, you could take film distribution that is really three different business units at the studio: Buena Vista Pictures Distribution, Miramax Films, and Buena Vista International (BVI). Buena Vista Pictures Distribution is domestic film distribution that comes straight out of the Disney studio; Miramax is its own distribution operation that exists in New York for doing domestic film distribution; and BVI handles all the international film distribution. We could say that's really one investment in film distribution; let's aggregate the way we think about that as an investment into an activity we call film distribution; and let's manage the technology investment and the enabling investment for those business units together to ring out all the leverage we can in the process. This is an example of exploiting what you're learning from an architectural perspective and moving that line upmaybe between that below-the-line infrastructure and above-the-line business unit support; putting a layer in there that's a common-services layer at the business level that is common in film distribution. A success we've had in that area in the past 10 years is that both Miramax Films and Buena Vista Pictures Distribution use the exact same technology to do film distributionit's a leveraged investment. Current thinking is aligned around business units. Future thinking is managing around activity. You could read that as broad business process. Film distribution as an activity is really one of the highest-level business processes where film distribution could be broken down into hundreds of individual business processes.

Q: What are the key business issues affecting IT today?

Steve Davis: Within the entertainment business, there two big issues right now: the impact of digital media on our business process, which then lends itself to the second topic of piracy. So if you look at digital media, what's happening to us is that the use of digital media technologyin preproduction, during production, and postproduction, and finally in distribution of our productis having a profound impact on how we think about our business processes. In preproduction, digital media makes it possible to see and conceive of things in a much more finished way than just drawing storyboards in the old analog way of doing things, so you're seeing a change there. In postproduction, now all of the film is in digital format, so the editing process and the process of putting sound on there and getting the finished product can move much more quickly and can also have a lot more freedom. In the process, you have a lot more options. Then ultimately, the ability for us to deliver the digital media through distribution could dramatically reduce our costs of film prints and the delivery of those film prints, and potentially change the face of the market for delivery of home entertainment products like DVDs directly to the consumer or through large retailers even if it's downloading a la iTunes.

Two big things come out of that. One is the way the market is addressed, and that's how the entertainment product goes through its lifecycle; the other is the impact of piracy as the result of the explosion of digital technology. The problem that we're starting to see is that because of the explosion of piracy, the distance of the world shrinking, and the ability of the product to move across geographic boundaries that we can't control anymore, we're more compelled to exploit our media through the different windows more quicklyto get it through film distribution into home entertainment and collect all the dollars we can before it starts to spread around without us being able to control it. And that means we have to be able to shorten our cycles.

We can't afford to wait four to six months to get the home entertainment product together in order to sell it to you. A lot of people thought that was a strategy, but that's just how long it takes to do it. We're looking at having greater flexibility so that we could release a movie in the theater and then three or four weeks later make it available to you in home entertainment or simultaneously release a product all over the world. This requires a real rethinking of our business processes. We'll be thinking around activity rather than around business units, so those kinds of strategies dovetail. Obviously, piracy plays a huge role in this because our products get pirated out of movie theaters and spread around the world very quickly. We must react to this and do something to address it in the marketplace so that we will not be too damaged by it like the music industry was.

Q: What about any business issues affecting IT more broadly?

Steve Davis: If we think about technology in general, I think we have a pretty good handle on what's happening in the technology marketplace. But one big issue is: How much of your technology is becoming a commodity? We understand that there's a certain amount of IT infrastructure that's a commodity. The trick is in understanding what part of it is and how to drive the cost down on that. From an IT-business perspective, you must understand where to draw the line on what's a commodity and when to push down the cost of that and seek broad efficiency in it versus the technology that is differentiating. The way we think about that is to identify the things we're doing that are unique and differentiating to the business as opposed to being a commodity and leverageable.

Making that call is what I said is below the line and above the line. Below the line: commodity, leverage. Above the line: unique, differentiatingapply the investment where it's really going to make the difference. That's an IT perspective; it's not just a broad entertainment business perspective. It's a way of thinking about managing your IT. If you're starting to figure out the commodity part of IT then you have to think about the best way to get the cost down. Do you want your company to be an expert at delivering help desk services to 100,000 desktops, or do you want to find someone in the marketplace who's doing that for a lot of large customers and can probably do it better and cheaper than you can. Will you have more satisfied customers and be paying less? That's when the outsourcing issue comes into play.

Q: Why is software architecture crucial to the changing face of software development?

Steve Davis: It goes back to what I mentioned earlier about thinking about how you create the components of your technology so that they work together and can be repurposed. You can't build technology pieces that can be composited or rearranged unless you think about how you can do that ahead of time. You need to plan upfront in excruciating detail. That's what software architecture is. If you started to build a house, you can just pour the foundation and start; some people who have done this long enough can get away with that. But if you're doing something new and big and you don't plan in meticulous detail, you'll do things you won't be able to undo, and it's going to be very expensive to undo it and will put a burden on your business because you won't be able to be agile in the way that your company will need to be agile in the marketplace. You must plot it out in full blueprints. You must have the concepts in line, and it needs to be a discipline. That's why in building architecture it's broken into disciplines.

Q: How is application lifecycle management evolving in relation to software architecture?

Steve Davis: A lot of people have moved away from the process of taking the requirements and throwing them over the fence to the developers, letting the developers work for a while to deliver a product, and then revising after that. Now you're more in a model of operational IT, where that core staff that we put next to the business is working with the business all the time, and they have a way of delivering value all the time and changing direction as the business changes direction. So rather than having a huge formal process where a big list of requirements is created, the business has on the table at any particular time what their big issues and initiatives are, and the IT staff is trying to move to the top of its list the things it can do to enable that.

It can be threefold: First, just keep the wheels on. Keep the blinking lights going. That's really just strict maintenance; it doesn't add much value. Then there are the two that really count. One evolving quicklythe second partis the delivery of enhancements, which I think is more compressed. People are getting into either monthly or quarterly cycles of delivering value all the time. There's an idea about how to improve the business process, and you quickly figure how you can get that built into the software system you have architected to be changeable. The third part is strictly operational. Say it's the launch of a movie, and you realize that looking at the pattern of a previous film will help you make sure you're placing it correctly in the marketplace. Now the technical guys can get in there and pull that data and slice and dice it in many ways and deliver that data quickly and add value to the business.

Another example is that there's a change in the business, such as you want to change contracts with the company delivering film prints. This means that there might be 5,000 existing license agreements inside the system that must be modified so that you can take advantage of this new deal. So, you can either take 50 staff members and set them in front of the application and have them manually change all those license agreements, or the database jockey can go in there and make the change overnight. Instead of spending 400 labor hours doing it, you're talking about spending two or three labor hours because you have an IT person who is highly embedded in the business, understands enough about it, and works with the operational side of the business to make the change.